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Water markets and soil salinity nexus: Can minimum irrigation intensities address the issue?

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  • Khan, Shahbaz
  • Rana, Tariq
  • Hanjra, Munir A.
  • Zirilli, John
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    Abstract

    Agricultural water markets can facilitate adjustments to water scarcity and competition and enhance economic efficiency, but markets cannot automatically balance efficiency, equity and environmental sustainability goals. The consequences of water trading on soil salinity in irrigation areas are not yet fully understood, but recognized as an issue that needs to be analysed. This paper explores the nexus between water trading and groundwater-induced soil salinity in a selected irrigated area in the Murray-Darling Basin. Results show that minimum irrigation intensities must be met to flush salts out of the root zone especially in shallow water table/high salinity impact areas. Such minimum irrigation intensities are helpful but not necessarily in deep water table/low salinity impact areas. Should water markets lead to permanent water transfers out of mature irrigation areas, minimum irrigation intensity needs might not be met in high salinity impact areas, causing substantial negative impacts on resource quality and agricultural productivity. Water trading that adds to salinity cannot be economically viable in the long run. The tradeoffs between water trading and environmental and equity goals need to be determined. This work contributes to the wider debate on Australian water policy aimed at achieving water security through water trading in the Murray-Darling Basin.

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    Bibliographic Info

    Article provided by Elsevier in its journal Agricultural Water Management.

    Volume (Year): 96 (2009)
    Issue (Month): 3 (March)
    Pages: 493-503

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    Handle: RePEc:eee:agiwat:v:96:y:2009:i:3:p:493-503

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    Web page: http://www.elsevier.com/locate/agwat

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    Keywords: Water trade Water entitlements Seasonal allocations Environmental externalities Water policy Gross margin Economic analysis Murray-Darling Basin;

    References

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    1. Brooks, Robert & Harris, Edwyna, 2008. "Efficiency gains from water markets: Empirical analysis of Watermove in Australia," Agricultural Water Management, Elsevier, vol. 95(4), pages 391-399, April.
    2. Deborah Peterson & Gavan Dwyer & David Appels & Jane Fry, 2005. "Water Trade in the Southern Murray-Darling Basin," The Economic Record, The Economic Society of Australia, vol. 81(s1), pages S115-S127, 08.
    3. Duke, Charlotte & Gangadharan, Lata, 2005. "Regulation in Environmental Markets: What can we learn from Experiments to Reduce Salinity?," 2005 Conference (49th), February 9-11, 2005, Coff's Harbour, Australia 137857, Australian Agricultural and Resource Economics Society.
    4. Brennan, Donna C. & Scoccimarro, Michelle, 1999. "Issues in defining property rights to improve Australian water markets," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 43(1), March.
    5. Peterson, Deborah C. & Dwyer, Gavan & Appels, David & Fry, Jane, 2004. "Modelling Water Trade in the Southern Murray-Darling Basin," Staff Working Papers 31925, Productivity Commission.
    6. Heaney, Anna & Dwyer, Gavan & Beare, Stephen & Peterson, Deborah C. & Pechey, Lili, 2006. "Third-party effects of water trading and potential policy responses," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 50(3), September.
    7. Wichelns, Dennis & Oster, J.D., 2006. "Sustainable irrigation is necessary and achievable, but direct costs and environmental impacts can be substantial," Agricultural Water Management, Elsevier, vol. 86(1-2), pages 114-127, November.
    8. Khan, Shahbaz & Mushtaq, Shahbaz & Hanjra, Munir A. & Schaeffer, J├╝rgen, 2008. "Estimating potential costs and gains from an aquifer storage and recovery program in Australia," Agricultural Water Management, Elsevier, vol. 95(4), pages 477-488, April.
    9. Corwin, Dennis L. & Rhoades, James D. & Simunek, Jirka, 2007. "Leaching requirement for soil salinity control: Steady-state versus transient models," Agricultural Water Management, Elsevier, vol. 90(3), pages 165-180, June.
    10. Conyers, M.K. & Hume, I. & Summerell, G. & Slinger, D. & Mitchell, M. & Cawley, R., 2008. "The ionic composition of the streams of the mid-Murrumbidgee River: Implications for the management of downstream salinity," Agricultural Water Management, Elsevier, vol. 95(5), pages 598-606, May.
    11. Letey, J. & Feng, G.L., 2007. "Dynamic versus steady-state approaches to evaluate irrigation management of saline waters," Agricultural Water Management, Elsevier, vol. 91(1-3), pages 1-10, July.
    12. Khan, Shahbaz & Rana, Tariq & Hanjra, Munir A., 2008. "A cross disciplinary framework for linking farms with regional groundwater and salinity management targets," Agricultural Water Management, Elsevier, vol. 95(1), pages 35-47, January.
    13. Bjornlund, Henning, 2003. "Farmer participation in markets for temporary and permanent water in southeastern Australia," Agricultural Water Management, Elsevier, vol. 63(1), pages 57-76, November.
    14. Easter, K William & Rosegrant, Mark W & Dinar, Ariel, 1999. "Formal and Informal Markets for Water: Institutions, Performance, and Constraints," World Bank Research Observer, World Bank Group, vol. 14(1), pages 99-116, February.
    15. Khan, Shahbaz & Tariq, Rana & Yuanlai, Cui & Blackwell, J., 2006. "Can irrigation be sustainable?," Agricultural Water Management, Elsevier, vol. 80(1-3), pages 87-99, February.
    16. Wichelns, Dennis, 1999. "An economic model of waterlogging and salinization in arid regions," Ecological Economics, Elsevier, vol. 30(3), pages 475-491, September.
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    Cited by:
    1. Wasantha Athukorala & Clevo Wilson, 2012. "Groundwater overuse and farm-level technical inefficiency: evidence from Sri Lanka," School of Economics and Finance Discussion Papers and Working Papers Series 279, School of Economics and Finance, Queensland University of Technology.

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